Media Analyst: Recession Will Last 18 Months

The Dow Jones/Nielsen Media and Money conference got off to a gloomy start this morning as Merrill Lynch media analyst Jessica Reif-Cohen offered a deeply sobering outlook for the industry.

"This year's been horrific," said Reif-Cohen, and next year won't be any better. Expectations that the consumer spending recession just getting under way will last a year or less are based on the last sixty years of economic history, but those, she said, are unlikely to be correct.

Rather, she predicted, this recession will resemble pre-World War II downturns, which typically lasted 18 months. Media stocks will start to rebound a quarter before the recession ends; ad spending won't recover until a quarter or two after.

Afterward, Sirius XM CEO Mel Karmazin took the stage, and seemingly brought an entire new reality with him. Karmazin turned his keynote interview into a relentlessly upbeat commercial for Sirius. "I believe we'll be the single most successful company in the audio entertainment space," he said. "If you go down the list as to who our competition is certainly, as ranked by revenue, we'll be there soon. Now we just need to grow our free cash flow."

Thanks to cost savings achieved by the merger, says Karmazin, Sirius will go from "this year negative $400 million ebitda to, next year, postiive $300 million of ebitda and growing very dramatically after '09."

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